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Employers are often surprised to learn that employees may be terminated while on (or after) Family Medical Leave Act (FMLA) or other type of protected leave. The key, however, is that there needs to be some sort of unrelated intervening event such as in the case of Naguib v. Trimark Hotel Corp. On September 12, 2018, the Eighth Circuit Court of Appeals upheld the U.S. District Court for the District of Minnesota’s decision in Trimark, that an employee was not wrongfully terminated while on Family Medical Leave Act (FMLA) protected leave.

In this case, the plaintiff, Isis Naguib, was a long-time (1977-2014) Executive Housekeeper at Millennium Hotel, a Trimark brand hotel. During the past three years of her employment, Naguib essentially testified against the company in an unrelated case, her son filed a discrimination complaint against the hotel, and she took FMLA leave for hypertension. While the FMLA request was approved, she was suspended and terminated soon after her return, as a result of an internal investigation.

While Naguib was on FMLA leave, the fill-in Head of Housekeeping personally observed timekeeping irregularities, and notified management. Notably, it was determined that Naguib told housekeepers to round down their time and not record all overtime hours and Naguib altered time records without the proper company form. In addition, one housekeeper regularly sewed hotel linens at home off the clock. This practice resulted in lower payroll costs, and thus, a bonus for Naguib. Ultimately, Millennium compensated the employees for the docked overtime, disciplined three other managers (who did similar practices on a smaller scale), and terminated Naguib just twelve days after her return from FMLA. The 8th Circuit Court of Appeals agreed with the District of Minnesota (the Honorable Judge Joan N. Ericksen) in its ruling that there were no specific links between her termination any any sort of discrimination, and that the investigation was only conducted as a result of irregularities found in her absence. Thus, the termination proper despite the other recent events.

The U.S. Department of Labor (DOL) was extremely busy with its announcements on August 28, 2018. Along with issuing 6 opinion letters, a directive, and launching a new web page (all of which I previously wrote about), it also announced the creation of not one, but two new websites, as well as the new Office of Compliance Initiatives. The new websites, worker.gov and employer.gov provide one location for information for federal worker protections (worker.gov) and information for employers about their responsibilities for federal worker protections (employer.gov).

The employer.gov website provides information regarding pay and benefits; workplace safety and health; small business resources; required posters; nondiscrimination; federal contractor requirements; and veteran and service member employment. It has frequently asked employer questions as well. In theory, the Office of Compliance Initiatives will work to promote greater understanding of federal labor laws and regulations, and will work with enforcement agencies to ensure compliance with the law.

What does that mean for the average employer? I have no idea. It seems to me to be yet another pair of government websites designed to provide consolidated information and links. But as always, nothing is as easy as it seems, and thus, it’s just one more set of data to review. In any event, Minnesota employers should also keep in mind that our laws cannot be ignored and so just because something is allowed under federal law, does not necessarily mean it is under state law. Thus, while this may be handy from a federal perspective, don’t forget about the Minnesota Department of Labor and Industry agency regulations and our Minnesota state wage and hour laws.

The U.S. Department of Labor’s August 28, 2018 Opinion Letter FMLA2018-1-A confirms that, in certain circumstances, an employer may “freeze” an employee’s attendance points during periods of Family Medical Leave Act (FMLA) leave. Attendance points are often used in a manufacturing or other settings when attendance is critical and HR needs a simple way to monitor and decide when to write up/terminate an employee. In this instance, the employer has a no-fault attendance policy whereby employees accrue attendance points over the course of 12 months “active service”, until a certain amount is hit (18 points), at which point they are automatically terminated.

Key here, is that employees do not accrue points for certain absences such as FMLA-protected, workers’ compensation, vacation, or other specified/approved leaves. However, the points collect over 12 months of “active service”, thereby freezing the points when the employee is on an approved leave. When the employee returns, their points pick up where they left off (thus, the points may be on their record for more than 12 months).

The DOL opines that such a method is acceptable under the FMLA, as the person is in no better or worse position because of taking FMLA. However, the DOL does caution that such practice is okay, so long as, “employees on equivalent types of leave receive the same treatment”. In other words, employers do need to be careful to ensure that all types of leave are treated the same and freeze the points for all approved absences (such as workers’ compensation, vacation, etc.), and may want to consider, for administrative purposes, a minimum time such as two weeks before absences freeze points.

 

As expected, on May 29, 2018, the Duluth City Council voted to pass the Earned Sick and Safe Time Ordinance (“Ordinance”). The Ordinance currently mandates that employers (wherever located), with 5 or more employees, provide paid sick and safe leave to employees starting January 1, 2020. That being said, given the recent ruling on the Minneapolis Ordinance, I would not be surprised if Duluth’s Ordinance is challenged as well, and eventually limited to employers with a business in Duluth.

What Does the Duluth Earned Sick and Safe Time Ordinance Require?

Effective January 1, 2020 employers are required to provide employees with 1 hour of earned sick and safe time for every 50 hours worked, up to 64 hours per year. However, the Ordinance only allows employees to use up to 40 hours of accrued but unused sick and safe time each year. Alternatively, employers can comply with the Ordinance by front-loading at least 40 hours of earned sick and safe time following the initial 90 days of employment each year and again at the beginning of each subsequent year.

Accrual begins at the commencement of employment, or for current employees, January 1, 2020. If an employee has unused accrued sick and safe time at the end of the year, the employee may carry over 40 hours of accrued but unused sick and safe time into the next year. Employers are not required to payout the accrued but unused sick and safe time hours upon termination or other separation from employment (make sure your handbook is clear especially if you have different types of time off such as vacation, sick, etc.).

Employers must compensate employees at their standard hourly rate, or an equivalent rate for salaried employees. The Ordinance does not require compensation for lost tips or commissions.

Who Is An “Employer” and “Employee” Under the Ordinance?

All individuals, corporations, partnerships, associations, nonprofit organizations with 5 or more Employees (as defined below), are considered an “employer” under the Ordinance. The number of employees is calculated based on the average number of employees per week in the previous year. Temporary employees from a staffing agency are considered an employee of the staffing agency under the Ordinance. Notably, in an attempt to avoid challenges to the Ordinance similar to the ones that arose surrounding the Minneapolis Sick and Safe Time Ordinance, the Duluth Ordinance defines an “employee” as:

  1. A person working within the geographic boundaries of Duluth for more than 50% of the employee’s working time in a 12-month period, or
  2. “is based in the city of Duluth and spends a substantial part of his or her time working in the city and does not spend more than 50 percent of their work-time in a 12-month period in any other particular place.”

The Ordinance does not cover independent contractors, student interns, or seasonal employees.

Construction Company Opt-Out

Similar to the Minneapolis Ordinance, construction companies may opt to satisfy the requirements of the Ordinance by paying at least the prevailing wage rate (Minn. Stat. 177.42), or the rates set for in a registered apprenticeship agreement.

What If An Employer Already Offers Paid Time Off?

Continue Reading Duluth Passes Sick & Safe Time Ordinance

In Minnesota, it is still lawful to ask job applicants about their pay and benefit history.  However, a number of states and cities are moving toward banning such practice. Thus, Minnesota employers with other locations should be mindful of these changing laws. The idea is that by doing so, the gender and minority job gap will eventually be equalized. As of today, the following locations (that I am aware of) have banned private employers from asking a job applicant about certain compensation history:

  • California. Effective January 1, 2018, per Assembly Bill 168, employers cannot ask salary history information, including compensation and benefits; however, applicants may volunteer the information.  Also note – “An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.”
  • Delaware. Effective December 2017, per House Bill 1, employers cannot seek  compensation (wages and benefits) history from an applicant or former employer, except after an offer has been made, for the sole purpose of confirming the applicant’s compensation history.
  • Massachusetts. Effective July 1, 2018, per S.2119, employers cannot seek the wage or salary history of a prospective employee. Note, this act has a lot more employer restrictions with respect to pay equity.
  • New York City. Effective October 31, 2017, per NYC Law, employers cannot solicit questions about current or prior earnings or benefits, search public records to find that information, or rely on current or prior earnings or benefits to set compensation.
  • Oregon. Effective January 1, 2019, per House Bill 2005, employers cannot screen job applicants based on current or past compensation (wages, salary, bonuses, fringe benefits and equity-based compensation), or determine compensation for a position based on current or past compensation for a prospective employee (except in the case of an internal transfer).
  • Philadelphia. Effective May 23, 2017, Philadelphia Code 9-1131 prohibits employers from relying on an applicant’s salary history when setting salaries.  While the law attempted to make inquiries into wage history unlawful, when challenged, the U.S. District Court for the Eastern District of Pennsylvania ordered that while employers cannot be prohibited from asking an applicant’s wage history, they can still prohibit reliance on salary history.
  • Puerto Rico. Effective March 8, 2018, per Puerto Rico Act No. 16-2017, employers may not ask an applicant or former employer of the current salary or wage history of the applicant.
  • San Francisco. Effective July 1, 2018, per the Consideration of Salary History Ordinance (also known as the Parity in Pay Ordinance), employers cannot consider the current or past salary of an applicant in determining whether to hire an applicant, and at what salary.  In addition, employers must post a salary history poster at the workplace.
  • Vermont. Effective July 1, 2018, per H294, employers cannot inquire or seek information regarding a prospective employee’s current or past compensation.

Keep in mind the above is just a quick overview; if any one of these applies to your business, you should familiarize yourself with the actual applicable law (most linked above). I suspect that the equal pay laws above are the start of a growing trend, and that if no federal law is passed in the next few years, state and local laws will continue. Until then, employers with locations in multiple states need to be sure to keep current on pending legislation and ordinances.

Hopefully you all got outside this weekend as Spring (and maybe we jumped right into summer) has finally arrived! In the spirit of Spring cleaning, I wanted to remind employers to take a look at your HR board, and make sure that all of your mandatory workplace posters are up to date. After having visited two employers in the past few weeks who were woefully outdated (one had minimum wage around $4), I thought it may be a good time to remind you all to check out your postings. If your board is cluttered with out of date notices, you might as well file those away too.

Minnesota mandatory workplace posters can be found here: http://www.doli.state.mn.us/LS/Posters.asp. Note, you can download it (for free) as a pack, and sign up to be notified when a poster has been updated (no reason not to!).  The last update was the age discrimination poster in September 2017.

The Equal Employment Opportunity Commission “EEO is the Law” poster can be found here: https://www1.eeoc.gov/employers/poster.cfm.

Federal workplace posters (other than the EEO one) can be found here: https://www.dol.gov/general/topics/posters.  Take note if you are a federal contractor, there are additional notices you will need to post which are also available at that website.

The National Labor Relations Board Employee Rights Notice can be found here: https://www.nlrb.gov/poster.  Keep in mind this is no longer mandatory to post due to a court injunction – but employers may chose to post.

Of course, there are several companies that will sell you an all-in-one laminated poster. Those are nice too if you don’t mind shelling out the money, but be sure you get the correct poster(s) – not just Minnesota, and not just federal. Also be sure that you update the individual notices on the all-in-one poster – just because you have shiny laminated poster doesn’t mean you can post it and forget it when updates are made. Finally, feel free to cross out notices on the poster that do not apply to your business (i.e. FMLA poster for a company that has less than 50 employees).

In one of two DOL Opinion Letters issued on April 12, 2018, the DOL clarified an extremely frequent question employers have – when to pay a non-exempt (hourly) employee for travel time (and gave me a great excuse to finally post a picture of a Jeep!). In other words, when is travel time “work”.  DOL Opinion Letter FLSA2018-18 finally provides some guidance regarding the DOL’s interpretation with three very common scenarios. Specifically, we know compensable work time generally does not include commute time, but what happens when an hourly worker does not have a normal business to commute to but rather goes to different job sites? Well, we know that travel away from home communities is worktime when it “cuts across the employee’s workday”, which includes the same normal work hours on a Weekend day as well (i.e. 9 to 5). Thus, the DOL has long held it does not consider work time that time spent as a passenger outside of regular working hours (see my earlier blog). However, what happens when employees don’t have a fixed location or set hours each day?

OPINION LETTER FACTS: At this employer, hourly technicians do not have a fixed location but work at varying customer locations each day. They have no fixed schedule, though they often start at 7 am, and often work between 8 and 12 hours, sometimes having to spend the night and complete the service the following morning. Occasionally technicians travel out of town for training. They are provided with vehicles to use for personal and business and covers all fuel and maintenance.

Scenario 1: “An hourly technician travels by plane from home state to New Orleans on a Sunday for a training class beginning at 8:00 a.m. on Monday at the corporate office. The class generally lasts Monday through Friday, with travel home on Friday after class is over, or, occasionally, on Saturday when Friday flights are not available.”

  • The key question is how to determine when travel time is compensable when there is no regular workday.
  • The DOL “scrutinizes” claims that employees don’t have regular or normal work hours, as after reviewing time records usually work patterns emerge (in other words it is a loosing argument for 99% of employers that there is no normal workday)
  • Assuming there is no regular workday, an employer can choose the average start and end times for the employee’s workday.  The employer and employee (or representative) can also negotiate and agree on a reasonable amount of time which travel outside of home community is compensable. When these methods are used, no violation will be found for compensating employees only during those hours.
  • If the employee chooses to drive instead of ride as a passenger in a plane, the employer may count as “hours worked” time spent driving the car or time that would have had to have counted as hours worked if the employee had taken the plane.
  • Time between a hotel and the remote work site is considered home-to-work travel and not compensable.

Scenario 2: “An hourly technician travels from home to the office to get a job itinerary and then travels to the customer location. The travel time from home to office varies depending on where the technician lives and can range from 15 minutes to 1 hour or more. All of this travel is in an assigned company vehicle.”

  • Time spent commuting between home and work is not compensable. Travel between site after arriving at work is. If an employee is required to report to a meeting place or pick up tools, travel from that site to the job site is part of the day’s work, regardless of contract, custom or practice.

Scenario 3: “Hourly technicians drive from home to multiple different customer locations on any given day.”

  • Same outcome as above.

Again, it’s still very fact specific, so keep in mind that this is an opinion letter related to one employer – but can be used as guidance for the rest.

On March 23, 2018, President Trump signed into law the Consolidated Appropriations Act. As you may remember, earlier this year the U.S. Department of Labor (DOL) sought comments related to rescinding portions of the 2011 Obama Administration’s ban on tip-sharing arrangements (see my earlier blog here). However, the Act eliminated the issue before the DOL could address it. Under the Act, “employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools.” However, there are two important caveats worth mentioning. First, the Act does not eliminate the prohibition on managers and supervisors from participating in tip pools. Second, the Minnesota Fair Labor Standards Act (MnFLSA) prohibits employers from requiring employees to share tips (it has to be their choice to tip pool).  Thus, while the FLSA now allows tip pooling, employers in Minnesota are still prohibited from requiring employees to share tips.  Additionally, the Act amends the FLSA to prohibit employers from keeping tips.

The DOL issued a Field Assistance Bulletin on April 6, 2018, further detailing the impact of the amendment, noting it expects to proceed with rulemaking in the near future to address what this means exactly. Importantly, the DOL stated that when determining whether an employee is a supervisor or manager for purposes of tip pooling, it will use the duties test set forth at 29 CFR 541.100(a)(2)-(4). This test looks at whether the individual’s primary duty is management of the business or a department or subdivision, whether that person customarily and regularly directs the work of two or more employees, and whether the individual may hire or fire other employees or whose suggestions and recommendations as to hiring/firing/promotions/other change of status is given particular weight. Violations of the amended Act may result in recovery of all tips unlawfully held by the employer plus an equal amount as liquidated damages as well as possible civil money penalties.

The Wage and Hour Division (WHD) launched their new program, the Payroll Audit Independent Determination (PAID) program on Tuesday, April 3, 2018. As I wrote about previously, PAID is the WHD’s 6-month pilot program that allows employers to self-audit their payroll practices. If an employer discovers an overtime or minimum wage violation under the Fair Labor Standards Act (FLSA), PAID allows them to voluntarily report it to the WHD. The goal behind PAID is to encourage resolution of claims promptly without litigation.  The catch to the program is employees are not required to accept the back wages from the employer or release any private right of action against the employer. Thus, an employer could still be subjected to a lawsuit. Additionally, the DOL can reject participation in the program and conduct a full investigation after the employer voluntarily reported a violation. As I said in my last post, participating in the program is more like playing a game of Risk than a get out of jail free card…